My friend Louis Gave likes to say, “When China walks into the room, profits walk out the door.” The country continues to raise its game when it comes to AI models and to remind again, CXMT just went public in Shanghai, notes Peter Boockvar, editor of The Boock Report.
Ignore the Chinese competition at your stock market peril. Last Friday was the first day of the World AI Conference in Shanghai. Moonshot said its Kimi K3 model was as good as OpenAI and Anthropic. We have US tech companies that have spent extraordinary amounts of money to build these models, powered by computing power from the data centers, and now they have a price war with lower-cost Chinese models.
(Editor’s Note: Peter is speaking at the 2026 MoneyShow/TradersEXPO Orlando, scheduled for Oct. 5-7. Click HERE to register.)
It’s not just US hyperscaler stocks that fell in response...but Chinese rivals to Moonshot, too. Z.AI (otherwise known as Zhipu) fell 29% in Hong Kong...MiniMax, the maker of the MiniMax M3 model, was lower by 16%...and Softbank, a big backer of OpenAI as we know, fell 9% in Tokyo.
According to OpenRouter, Chinese AI models now have almost 60% of weekly token market share being used by US companies. The CXMT IPO, along with the massive CapEx announcements from Micron Technology Inc. (MU), Samsung, and SK Hynix Inc. (SKHY) over the past few weeks, continued to weigh on semis, too.
I’ll say for the umpteenth time: US tech faces a competitor in the Chinese that they never really faced before outside of the Japanese in the 1980s. And again, Chinese companies first focus on market share rather than profits – and your margin is their opportunity.
